PRESS: Rostelecom’s management fails to reach 2015–2016 targets

MOSCOW, Jun 19 (PRIME) -- Management of Russian state-controlled telecom operator Rostelecom has failed to achieve targets for two years in a row, cutting remuneration to the company’s former head and now Deputy Communications Minister Sergei Kalugin, business daily Vedomosti reported on Monday.

The operator’s financial results for 2016 were below the figures stipulated by a long-term development program, according to a report of an auditing commission for a general meeting of shareholders held on Monday.

There are nine key performance indicators, including seven financial ones, like total shareholder return (TSR), return on invested capital (ROIC), revenue, operating income before depreciation and amortization (OIBDA) margin, and innovative indicator, among others.

Under the basic scenario, only the innovative indicator is reached out of the seven, and four are reached according to the pessimistic scenario, the commission said.

Rostelecom’s spokeswoman Kira Kiryukhina said that the current program was approved in 2014 and was based on the outlook for social and economic development as of the same year, in which the gross domestic product was supposed to grow 2–3% annually, and the U.S. dollar rate amounted to 38–39 rubles. In 2015–2016, the economy stagnated against the predicted growth, which did not allow the company to stick to the basic scenario, she said.

Two former employees of Rostelecom, part of Kalugin’s team, said that the macroeconomic situation depressed the business, and its margin was affected by a non-receipt of budget money for bridging of the digital divide.

Big companies’ development programs imply personal responsibility of top executives. Rostelecom’s former top manager said that Kalugin’s remuneration depended on whether the company achieved the basic scenario, and its amount was correspondingly reduced. No figures were disclosed.

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